An estimated 1 million people in the US and 300 million people worldwide are chronic carriers of hepatitis B virus (HBV). Each year in the US, more than 300,000 people contract HBV. Approximately 2-10% of adults and 25-80 of children under the age of 5 who become infected fail to clear the virus within 6 months and are considered to be chronically infected carriers of HBV. Carriers of HBV may develop cirrhosis and/or hepatocellular carcinoma. To date, there is no safe and fully effective treatment of HBV-induced chronic liver disease. Presently, therapy for the treatment of HBV is parenteral alpha interferon (IFN). However, it only has an estimated response rate ranging from 30 to 40% and has many significant side effects including flu-like symptoms such as fever, headache and myalgias; bone marrow suppression, depression and other psychiatric effects and irreversible hypo or hyper thyroidism. Lobucavir is a nucleoside analog such as lamivudine and famciclovir which are also being studied for treatment of HBV. The primary goal of this study is to determine the antiviral efficacy and safety of lobucavir (BMS-180194) against hepatitis B virus (HBV) in humans when given for 28 days. Two separate dosing regimens of lobucavir will be evaluated in comparison to a placebo control for the inhibition of HBV replication. Antiviral efficacy will be assessed by determining HBV DNA levels by branched DNA (bDNA) hybridization assay weekly during the 28 day dosing period and during the first four weeks post-therapy to assess the percent of subjects who have return of HBV DNA levels to baseline (+/- 10%) and the median time to rebound. Subjects will also be followed for three months post-dosing (for total study duration of four months) to monitor for any delayed toxicities. In addition, this study will investigate the pharmacokinetics of lobucavir in these subjects.